How Odd

A decent piece on macroeconomics in The Guardian.

The surge in oil prices is a supply side shock, yes, of course it will lead to inflation, but the point is to have that one single burst of inflation rather than embedding it in the decisions people make going on years into the future.

You might not be surprised to find that it was not written by The G\’s economics editor.

Well, Quite

A settled view, among the electorate as well as the commentariat has formed, one that will take an earthquake to shake. I can see its distortions and exaggerations and yet, no matter how much I would like to, I cannot depart from the substance of it. I find myself in sympathy with those who admired Brown through his 10 long years as chancellor and who keenly awaited his premiership, and yet now conclude that they got Brown wrong – that, on the current evidence, he is simply not up to the job.

Although there are those of us who thought he wasn\’t a very good Chancellor either….in fact, a very bad one.

Free Schools

Fraser Nelson advises Cameron to promise them now, so as to be able to hit the ground running and get them up and operating properly within the term of the new government.

Can\’t say I disagree either. I do like this:

Labour\’s objections to a Free School scheme simply underline its potency. Ed Balls, the Schools Secretary, says Free Schools would be "unplanned" by ministers, as if this were a self-evident absurdity. Unpopular schools would face ruin, he says, while threatening to close them himself. Teachers will be poached, rather than sacked, as their career options multiply.

That\’s right, Balls in complaining about what is actually the whole point.

Insiders and Outsiders

There\’s a great deal of truth in this:

Chief executive Mark Clare was so thrilled with Barratt\’s prospects that in February 2007 he bought rival Wilson Bowden for £2.2bn. At the time, Clare had been in the job only a few months and had little experience of housebuilding. By contrast, David Wilson, who founded Wilson Bowden, had spent a lifetime in the industry. The timing of his exit, even though he took only about half his payment in cash, looks exquisite.

Equally clever was the decision of Jon Hunt, the founder of Foxtons, to sell his posh estate agency last July, the peak of the market, for £390m. Had Hunt waited 12 months, he would not have got even a quarter of that price. In fact, as the housing market crumbles, many agencies are simply unsaleable.

As is often the case, when those who know the business backwards, especially if they are the founders, reckon it\’s to time to sell, the rest of us should take note. The departure of Wilson and Hunt signalled the coming of winter.

Markets, by their very definition, are made up of people who place different values on the same things. But when you see the industry insiders selling off to those who know a little less, that\’s as useful a sign of the peak as you\’re going to get.

Now We\’ve Price Controls!

Wondrous: the descent into authoritarianism continues

Shops could be forced to raise the basic cost of alcoholic drinks by a third or more, as part of plans to make it harder for young people to access cheap alcohol.

Ministers at Westminster are considering plans similar to those already put forward in Scotland, to impose a minimum price for alcohol. Any legislation could see English supermarkets and corner shops ordered to charge a minimum of between 35p and 40p per unit.

The move is aimed at curbing the binge-drinking culture among teenagers, who according to recent figures drink more than youngsters in most other developed countries.

That some thousands, or even some tens of thousands, already break the law to purchase alcohol while underage isn\’s actually all that strong a justification for raising the price of alcohol for the milions of people who buy it legally and drink it without vomiting over the shopping centre.

What seems to have been missed as well is that minimum prices, well, they do just increase the profits of the supermarkets.

Is that really what these campaigners are after?

Is Obama Insane?

Seriously, is Barack Obama insane here or has he just been misreported?

The heart of Sen. Obama\’s spending program is his plan to spend $15 billion a year for 10 years on energy technology. It would be funded by revenue collected from a separate Obama proposal to cap greenhouse emissions through a system of trading pollution permits. Sen. Obama would auction those permits to producers of carbon dioxide, such as electric utilities, and figures the sales would yield about $100 billion a year. Most of that would go to consumers as rebates on utility bills, he said.

OK, cap and trade, auction all permits, very good.

But spend the money raised on rebates to energy consumers? WTF?

Seriously?

We\’re going to tax energy at one end of the system then subsidise it at the other?

Use the cash raised to lower other taxes, perhaps, use it to provide a citizen\’s dividend maybe, heck, spend it even.

But subsidise utitlity bills with the money you\’ve just raised by a tax on those utilities?

That\’s insane.

Caroline Lucas MEP

My God, the woman really is dense, isn\’t she?

Here\’s a video of her talking about how the global trade system should be reformed.

She says that the current system of "Global Competition" should be replaced with one of "Global Co-operation".

Err, she\’s obviously entirely unaware of the fact that the market itself is the most glorious example of human co-operation: not just tens of millions, hundreds of millions, but billions of people co-operate right around the world to bring you the things that you use in your life.

Quite seriously, any and everyone who has bought a metal halide light bulb anywhere in the globe in the past decade has relied, in part, on a small group of Kazakh uranium miners and the work they did in the 80s and 90s. Indeed, just about anyone who has driven down a road lit by street lamps has done so.

Shit, has the woman never read "I Pencil"?

She then compounds the offence by stating that the New World Order should contain safeguards for local production for local consumption: self-reliance.

This idiot is suggesting that we should prompt "Global Co-operation" by not co-operating with Johnny Foreigner.

How do people like this get elected?

 

Umm, Subs?

I really don\’t think this is what George Monbiot meant to say:

We shouldn\’t be surprised to hear that George Bush dined with a group of historians on Sunday night. The president has spent much of his second term pleading with history. But however hard he lobbies the gatekeepers of memory, he will surely be judged the worst president the United States has ever had.

Even if historians were somehow to forget the illegal war, the mangling of international law, the trashing of the environment and social welfare, the banking crisis, and the transfer of wealth from rich to poor,

Eh?

the transfer of wealth from rich to poor

Don\’t these people have editors?

Polly Today

Now, at the first anniversary of the smoking law, it\’s been a triumph: 28% have stopped smoking, 43% have tried,

Eh? Without bothering to look it up, I thought that the total number of smokers was about 30% of the population?

As for drink, what\’s the point of Labour handwringing when it could do what it did with smoking? As Scotland now proposes, ban off-licence sales to under-21s, control supermarket prices strictly with no loss-leading two-for-one offers making booze cheaper than water. Why not ban drink advertising, as with cigarettes? Drink consumption is highly price-sensitive, and cirrhosis and drink-related diseases far worse in the poorer areas. Changing cultural attitudes to drink is not impossible. But part of the government\’s reluctance to challenge all manner of culturally destructive forces springs from its fear of confronting the great gods of the market.

And as we all said right at the beginning: once they\’d done for the smokers they would come for the drinkers. Further, look at that, she wants to change the entire culture! Us Anglos Saxons and the Scandanavians have, for a millenium or more, had a binge relationship with alcohol and she\’s going to change all of that with a little manipulation of the tax system?

Sheesh.

Oh, and the obligatory Polly error of today is this:

Drink consumption is highly price-sensitive,

Depends which booze you\’re talking about.

An extensive review of the economic literature on alcohol demand concluded that based on studies using aggregate data (i.e., data that report the amount of alcohol consumed by large groups of people), the price elasticities of demand for beer, wine, and distilled spirits are -0.3, -1.0, and -1.5, respectively (Leung and Phelps 1993).3 (3Leung and Phelps (1993) emphasize that these numbers represent “best guesses” because of the wide range of estimates contained in the studies reviewed.) These estimates suggest that beer consumption is relatively insensitive to price changes, whereas demand for wine and distilled spirits is very responsive to price.

That beer that is sold in the two for one offers is exactly the type of booze where the demand is highly insensitive to price (correction in comments).

My final point would be those "great gods of the market". Markets are simply the cumulative end results of millions of individual decisions. In this case, the reason that people drink lots of alcohol is because they want to….that\’s why they buy it, see? The Great God of the Market is in fact the individual liberty to design one\’s own path to the grave. We all get there in the end after all, and preferably without being told what we may or may not do, as long as our actions are not harming others.

 

Eh?

Mr Cameron said: "If we find out that our neighbours, or households similar to ours, are using half as much energy as we are then we\’re much more likely to bring our own consumption down in line. So how can we help people find out how much energy they\’re using compared to their neighbours? There\’s a simple answer: energy bills.

"So I can announce that a Conservative government will make sure every gas and electricity bill contains information that allows each household to compare their energy consumption with other households.

What is the Boy Dave (C) drivelling on about?

These people currently receive bills, don\’t they? So they can show them to their neighbours if they wish…and on that bill will be the number of units of power they have used, the price for those units and the total costs.

What actually needs changing here?

Changing the Bail Laws

Hmm, I\’m really not all that sure about this.

Murder suspects should not be eligible for bail except from in very rare circumstances, the Government is set to recommend. Jack Straw, the Justice Secretary, will announce a review into the bail laws. At the moment the judge has discretion in setting bail terms in murder cases.

Now we can see why Straw thinks a tightening up is necessary: that bloke Weddell strangled his wife then killed two more while on bail.

Howeverr, however, just because you\’ve been accused of, charged with, murder, doesn\’t mean you actually committed murder: that\’s what the trial is going to determine at some point in the future.

So a general assumption of no bail for those accused of murder is quite literally the jailing of the innocent.

A defendant is kept in custody if there are reasons to believe he or she will commit an offence or interfere with witnesses.

Those seem good reasons to deny bail: what you\’ve been accused of doesn\’t seem to be.

Quick Question

Umm, if we\’re all assuming that one of the solutions to this Irish Referendum thing is a two speed Europe (ie, some integrate more than others) then what\’s wrong with a three speed Europe? Something which we actually have at the moment anyway: there\’s the EU itself, the euro and Schengen and the varied memberships don\’t map exactly over each other.

In fact, what\’s wrong with a 27 speed Europe, where sovereign governments decide who they would like to co-operate with, when and how?

To be honest, I really can\’t see what I\’m missing here.